gm readers and welcome back to another edition of Decrypting DeFi.
DeFi developer Andre Cronje’s return to crypto looks like much more than just a phase.
After saying goodbye to the game (again) last March, then returning in November, it now looks like the mind behind Yearn Finance and Keep3r (and numerous other high-profile projects) is rolling up his sleeves and getting back to work.
He’s long been associated with the speedy layer-1 blockchain called Fantom, wearing the title of co-founder and architect of the Fantom Foundation, and now it appears he’s re-building the network’s native stablecoin, fUSD.
It’s currenty dire straits for the dollar-pegged coin, which currently trades at $0.68 and hit a low of $0.22 back in November.
The token’s mechanics, which let users mint the stablecoin using an overcollateralized amount of Fantom’s native FTM token, fell apart and have essentially been stuck that way as the community has placed little trust in fUSD’s revival.
The token has continued to tumble, dropping another 15%, but that’s primarily due to the announcement to shutter this version altogether.
The process to merge this dead stablecoin (v1) to a new and revived one (v2) is relatively straightforward: Liquidate any positions in which the value of the stablecoin is equal or greater to the FTM or staked FTM (sFTM) backing that stablecoin.
Put otherwise, Fantom is clearing out the bad debt and starting anew.
And reviving a native stablecoin is good for a lot of reasons, but their resistance to volatility remains a key attractor for teams trying to build on blockchains.
As Cronje writes: “for Fantom, we want to be able to provide builders, partners, and users, a predictable and budget-friendly system.”
What better way to build a budget than by turning to the dollar (rather than magic internet money)?
Bringing a stablecoin back from the dead isn’t the only thing up Fantom’s sleeve this year either.
Fantom on the up (and up)
Over the past week, FTM has soared roughly 35%.
Stepping back even further and the price has soared a whopping 215% since January 1.
FTM price between January 1, 2023 and February 2, 2023. Source: CoinGecko.
The run-up really took flight at the turn of the year, and this can likely be attributed to a wave of updates and general chatter from Fantom and Cronje about what the protocol is up to.
Fantom has, for instance, introduced an interesting mechanism by which 15% of the gas fees on a network are also sent to the developers of the specific contract. So, if you build a popular dapp on Fantom, you could get rewarded further simply by people using it.
Later this year, according to Cronje, the blockchain will also launch gas subsidies that let folks jump over to Fantom without needing any FTM (which is the network’s native gas token).
It looks like a full slate for the layer-1 blockchain this year.
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